United Nations Commission On International Trade Law On Dispute Resolution

United Nations Commission On International Trade Law: History

UNCITRAL which in full stands for United Nations Commission on International Trade Law is a body established by the United Nations Assembly on the 17th December 1966.  The UNCITRAL headquarters are in Vienna (Austria). The purpose of the abovementioned commission is to promote the progressive harmonization and unification of international trade law governed by conventions and other instruments. That is, in a case where there is a dispute in relation to the international sale of goods, there are rules and laws enacted by the said commission which tend to resolve any arising dispute between contracting states. This is made possible by passing of instruments such as conventions and models laws that govern the formation of international sale of goods.

Members/Structure Of The Commission

The Commission is composed of sixty members. The discretion to select the member states lies within the United Nations General Assembly. The membership takes the duration of a maximum of six years with the membership expiring every three years. The membership ensures representation of the world’s geographic regions and principal economic and legal systems. There are 14 member states from Africa, 14 from the Asia-Pacific region, 10 from Latin-America and the Caribbean, 8 from the Eastern Europe and 14 from Western Europe and Others.

How The Commission Functions

The commission works in 6 UN languages, namely; Arabic, Chinese, English, French, Russian and Spanish. The decisions made by the Commission are made on a consensual basis. That is, for a decision to be passed by it, there has to be consent made by the participants on the seating. The participants include member states, observer state and non- and inter-governmental organizations.

The participants have a mandate to finalize and or adopt the drafts referred to by the working groups of the commission. The working groups are divided into six with each having its own obligations. The first working group focuses on micro, small and medium sized enterprises. Secondly there is a working group whose mandate is to settle disputes. There is also an ISDS Reform working group. The fourth working group is based on electronic commerce. The fifth working group works on insolvency law and the last one on security interests respectively.

UNCITRAL On Dispute Settlement

Amongst its mandates, the UNCITRAL is established with the purpose of settling disputes that arise between states during trade. The commission adopts arbitration and conciliation as a method of its dispute resolution. This commission has enacted laws that govern international trade thus providing statutes that are referred to when disputes arise between trading states. These statutes are:

  1. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (The New York Convention passed in 1958. According to the objectives stated in the Convention, the legislators recognize the growing importance of international arbitration as a means of settling international commercial disputes. This is made possible by the fact that it seeks to provide common legislative standards for the recognition of arbitration agreements and court recognition and enforcement of foreign and non-domestic arbitral awards.
  2. UNCITRAL Arbitration Rules enacted in 1976: according to Article 1 of the rules, the rules apply where parties in a trade agreement consent to the application of such rules in a case of a dispute. The rules govern the arbitration process to be followed when there is an arbitral proceeding between parties.
  3.  UNCITRAL Conciliation Rules which has been in force since 1980: It provides a comprehensive set of procedural rules upon which parties may agree for the conduct of the arbitral proceedings arising out of their commercial relationship.  They cover all aspects of the conciliation process, providing a model conciliation clause, defining when conciliation is deemed to have commenced and terminated and addressing procedural aspects relating to the appointment and the role of conciliators and the general conduct of proceedings.
  4. UNCITRAL Model Law on International Commercial Arbitration (1958):  this set of laws assist contracting states reform and modernize their laws or agreements on arbitral procedure such that they take into consideration the particular features and needs of international commercial arbitration. 
  5. UNCITRAL NOTES ON ORGANISING ARBITRAL PROCEEDINGS: this aims at assisting arbitration practitioners with the issues associated with the arbitral proceedings. The notes provide a guide for practitioners providing for amongst others; confidentiality, transparency, documentary evidence and the seat of arbitration.
  6. UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL CONCILIATION (2002): This is designed with the aim of helping states in reforming and modernizing their laws on mediation procedure.
  7. RECOMMENDATIONS TO ASSIST ARBITRAL INSTITUTIONS AND OTHER INTERESTED BODIES WITH REGARD TO ARBITRATION (2012)
  8. UNCITRAL RULES ON TRANSPARENCY IN TREATY-BASED INVESTOR STATE-ARBITRATION (2013)

Although the list of the enacted legislations to solve arising disputes between contracting parties is not exhaustive, the common aim or objectives of the instruments is to provide guidelines, laws, rules and regulations  that govern such an agreement. The said parties agree that they will be governed by UNCITRAL for the instruments to apply. 

The article is written by Pulane Kholoanyane from the National University of Lesotho.

The article is edited by Shubham Yadav, pursuing B.com LL.B. (4th Year) from Banasthali Vidyapith.

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